Monday’s engulfing candle [R] on the S&P 500 warns of reversal to re-test support at 1270. Respect of the zero line (from below) by 21-day Twiggs Money Flow would indicate strong medium-term selling pressure. Failure of support would offer a target of 1200*.
* Target calculation: 1270 – ( 1340 – 1270 ) = 1200
The market may be forming a bottom having already tested lows. An inverted head-and-shoulder is in prospect. Of course negative collapse from here would ruke out such a positive interpretation.
Follow-through above 1335 would be bullish and would indicate another test of 1410, but that may not be the end of it. Momentum is falling.
Colin
I left a comment on fedex that was meant to be here. Anyway my comment was that you’re ignoring a positive divergence between the money flow and the price of the sp
John B
Good point. Recovery above 1335/1340 would strengthen this.